Kolluri Sandeep, Hyderabad V. Income-Tax Officer, Ward-9(1), Hyderabad

ITA 22/HYD/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82647 (ITAT-HYDERABAD)
• Duration Of Justice: 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 06-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMAKRISHNA BANDI
• Assessee Lawyers: K C DEVDAS
• Keywords: Unexplained investment; Peak credit; Additional evidence
• Section: 144; 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 22/HYD/2014 ASSESSMENT YEAR 2009-10 SRI KOLLURI SANDEEP HYDERABAD PAN: BCMPK6169B VS. THE INCOME TAX OFFICER WARD-9(1) HYDERABAD APPELLANT RESPONDENT APPELLANT BY: SRI K.C. DEVDAS RESPONDENT BY: SRI RAMAKRISHNA BANDI DATE OF HEARING: 1 1 .1 2 .2014 DATE OF PRONOUNCEMENT: 24. 12.2014 O R D E R PER ASHA VIJAYARAGHAVAN, JM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE CIT(A)-VI, HYDERABAD DATED 23.8.2013 F OR ASSESSMENT YEAR 2009-10. 2. THE ASSESSEE IS AN INDIVIDUAL AND FILED HIS RETURN OF INCOME ON 31.7.2009 DECLARING INCOME OF RS. 1,66,80 0. NOTICES U/S. 143(2) AND 142(1) OF INCOME-TAX ACT, 1 961 WERE ISSUED ON 6.6.2011. SINCE THERE WAS NO RESPON SE FROM THE ASSESSEE, ASSESSMENT WAS COMPLETED U/S. 14 4 OF THE ACT AND WHILE DOING SO THE AO HELD THAT THE ASS ESSEE HAS MADE CASH DEPOSITS OF RS. 17,77,000 IN HDFC BAN K. THE ASSESSING OFFICER HELD THAT IN THE ABSENCE OF A NY DETAILS AND EXPLANATION FOR SOURCES OF DEPOSITS, TH E ENTIRE CASH DEPOSITS OF RS. 17,77,000 IS TO BE TREATED AS ITA NO. 22/HYD/2014 KOLLURI SANDEEP ================= 2 UNEXPLAINED INCOME OF THE ASSESSEE AND ADDED THE SA ME TO THE INCOME RETURNED. AGGRIEVED, THE ASSESSEE FI LED APPEAL BEFORE THE CIT(A). 3. BEFORE THE CIT(A), THE CASE WAS POSTED FOR HEARING ON VARIOUS DATES. NOTICES WERE SERVED ON THE ASSES SEE OR THE AR OF THE ASSESSEE SRI S.S. REDDY, CA. THE ASS ESSEE WAS DISSATISFIED WITH THE REPRESENTATION OF HIS AR AND THE ASSESSEE HIMSELF STATED THAT HE IS AN NRI WHO CAME BACK TO INDIA FOR SETTLEMENT AND WAS FILING RETURNS OF I NCOME SHOWING INCOME FROM PROPERTY AND INTEREST AND THAT HE WOULD APPEAR IN PERSON AND NOT THROUGH HIS REPRESENTATIVE. THERE WERE CASH DEPOSITS INTO THE SB ACCOUNT MAINTAINED WITH HDFC BANK BY THE ASSESSEE. 4. THE ASSESSEE OBJECTED FOR SUCH ADDITION MADE BY THE ASSESSING OFFICER AND SUBMITTED THAT THE CREDIT S COULD NOT BE EXPLAINED BEFORE THE ASSESSING OFFICER DUE T O CERTAIN PERSONAL REASONS FOR WHICH HE OR HIS AR COU LD NOT BE PRESENT BEFORE THE AO, ON THE GIVEN DATES OF ASSESSMENT PROCEEDINGS. REGARDING THE SOURCES FOR C ASH CREDITS, IT WAS BROADLY INDICATED THAT THE AMOUNTS REPRESENT THE WIRE TRANSFERS MADE BY HIM TO HIS FRI ENDS, RELATIVES AND PARENTS, DURING HIS DAYS OF STAY IN U SA, AND ON RETURN FROM USA, THE SAME AMOUNTS ARE COLLECTED IN CASH FROM SUCH PERSONS, AND WERE DEPOSITED INTO THE BANK ACCOUNT UNDER REFERENCE DURING THE A.Y. 2008-09. I T WAS ACCORDINGLY CONTENDED BY THE ASSESSEE THAT THE AMOU NTS OF CASH DEPOSITS OF RS. 17,77,000/- DOES NOT CONSTI TUTE INCOME. 5. THE ASSESSEE WITHDREW THE POWER OF ATTORNEY ISSUED TO THE AR. HOWEVER, THE ASSESSEE HAD NOT APPEARED ITA NO. 22/HYD/2014 KOLLURI SANDEEP ================= 3 BEFORE THE CIT(A) AND HENCE THE CIT(A) PASSED AN EX -PARTE ORDER U/S. 144 STATING AS FOLLOWS: '5.3 AS COULD BE SEEN FROM THE INFORMATION AVAILABLE ON RECORD, THE ASSESSEE FAILED TO EXPLAIN THE SOURCES OF THE CASH DEPOSITS INTO BANK ACCOUNT, EITHER BY SHOWING THE DETAILS OF HIS EARNINGS IN US, THE DETAILS OF TRANSFER OF THE AMOUNTS TO THE ACCOUNTS OF PARENTS, FRIENDS, RELATIVES ETC., AS STATED BY HIM. NO EVIDENCE AS TO THE RECEIPT OF CASH FROM THE SAID PARTIES ARE SUBMITTED OR INDICATED BY THE ASSESSEE. UNDER THE CIRCUMSTANCES, IT IS PRESUMED THAT THE ASSESSEE DOES NOT HAVE ANY EXPLANATION ON THE CASH DEPOSITS MADE INTO BANK ACCOUNT DURING THE RELEVANT FINANCIAL YEAR OF ASSESSMENT YEAR 2009-10. THE ASSESSEE FAILED IN THIS REGARD TO EXPLAIN THE SOURCES, AND THE EXPLANATION OFFERED, IS NOT ACCEPTABLE FOR LACK OF RELEVANT EVIDENCE OR INFORMATION. WHERE THE ASSESSEE FAILS TO EXPLAIN THE SOURCES FOR INVESTMENTS, WHICH IS THE CASH DEPOSITS INTO BANK ACCOUNTS IN THIS CASE, THE SAID AMOUNTS CONSTITUTED THE UNEXPLAINED INVESTMENTS THEREBY UNEXPLAINED INCOME FOR HIM. THIS VIEW IS SUPPORTED BY THE DECISION OF HONOURABLE SUPREME COURT IN THE CASE OF ROSHAN D. HATTI VS. CIT (107 ITR 938), WHEREIN IT HAS BEEN HELD THAT THE ONUS OF PROVING SOURCES FOR INVESTMENTS, LIES ON THE ASSESSEE. FOLLOWING THE RATIO OF THE DECISION, I AM OF THE CONSIDERED OPINION THAT THE AMOUNT OF RS. 17,76,000/- BEING THE CASH DEPOSITS INTO THE BANK ACCOUNT REPRESENT THE UNEXPLAINED INVESTMENT THEREBY UNEXPLAINED INCOME FOR THE APPELLANT FOR THE YEAR UNDER REFERENCE. HENCE, THE ADDITION OF RS. 17,77,000 STAND SUSTAINED. THIS GROUND OF APPEAL IS TREATED AS DISMISSED.' 6. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 7. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE SRI K.C. DEVDAS HAS SUBMITTED THAT BOTH THE LOWER AUTHO RITIES HAD PASSED EX-PARTE ORDERS U/S. 144 AND THERE WAS N O ITA NO. 22/HYD/2014 KOLLURI SANDEEP ================= 4 OPPORTUNITY TO THE ASSESSEE TO EXPLAIN THE CREDITS IN THE BANK ACCOUNT. IT WAS STATED THAT THE ASSESSEE RETU RNED TO INDIA FROM USA ON 7.4.2008 AFTER WORKING THERE FOR 7 YEARS WITH AN INTENTION TO SETTLE IN INDIA AND HAD FILED RETURN OF INCOME FOR A.Y. 2009-10 I.E., FOR THE VERY FIRST YE AR OF HIS SETTLEMENT IN INDIA. 8. THE ASSESSEE GAVE COPY OF BANK ACCOUNT TO THE CIT(A) AND ALSO A LETTER THAT HE DID NOT DO ANY BUS INESS DURING THE YEAR. IT WAS STATED THAT THE AMOUNTS DE POSITED IN THE BANK ACCOUNT ARE HIS EARNINGS IN USA AND IT WAS ALSO SUBMITTED THAT HE HAD DEPOSITED THE AMOUNTS WHICH H E HAD DRAWN EARLIER FROM THE SAME BANK ALSO. THE LEARNED COUNSEL FOR THE ASSESSEE POINTED OUT TO PAGE 5 OF T HE PAPER BOOK WHEREIN THE HDFC BANK HAS STATED THAT 'TRANSACTIONS WITH NARRATION CHEQUE-PAID-VANASTHALI - PURAM' PERTAINS TO CASH WITHDRAWALS AT THE BRANCH. THE COUNSEL POINTED OUT THAT THE DEBITS IN THE BANK ACC OUNT ARE ACTUALLY CASH WITHDRAWALS WHICH ARE BEING WRONGLY N OTED BY THE BANK AS CREDIT AMOUNT. THIS EXTRACT FROM BA NK ACCOUNT AT PAGE 5 PRODUCED BY THE LEARNED COUNSEL W AS REQUESTED TO BE TREATED AS AN ADDITIONAL EVIDENCE PRODUCED BEFORE US. IT WAS ALSO SUBMITTED THAT SIN CE THERE HAVE BEEN DEPOSITS AND WITHDRAWALS, THE PEAK CREDIT IN THE ASSESSEE'S BANK ACCOUNT STATED TO BE OF RS. 4,85,00 0 SHALL BE DETERMINED BY THE ASSESSING OFFICER AS INCOME. 9. THE LEARNED DR REQUESTED THAT THE PEAK CREDIT SHALL BE ONCE AGAIN VERIFIED. 10. WE HAVE HEARD BOTH THE PARTIES. IN THESE CIRCUMSTANCES, WE REMIT THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER TO CONSIDER THE ADDITIONAL EVIDEN CE FILED ITA NO. 22/HYD/2014 KOLLURI SANDEEP ================= 5 AT PAGE 5 OF THE PAPER BOOK AND DETERMINE THE PEAK CREDIT AFTER GOING THROUGH THE STATEMENT OF ACCOUNTS FILED BY THE ASSESSEE AT PAGE 8 OF THE PAPER BOOK AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 24 TH DECEMBER, 2014. SD/ - (P.M. JAGTAP) ACCOUNTANT MEMBER S D/ - (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER HYDERABAD, DATED 24 TH DECEMBER, 2014 TPRAO COPY FORWARDED TO: 1. SRI KOLLURI SANDEEP, H. NO. 16 - 11 - 740/9/32, GADDI - ANNARAM, DILSUKHNAGAR, HYDERABAD-500 060. 2. THE INCOME TAX OFFICER, WARD - 9(1), 2 - D, IT TOWERS, AC GUARDS, HYDERABAD. 3. THE CIT(A) - V I , HYDERABAD . 4. THE CIT - V I , HYDERABAD . 5. THE DR 'A' BENCH, ITAT, HYDERABAD